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Cyprus: Labour Regulation

Social Security

There is a mandatory earnings-related social security scheme in Cyprus which applies to both employed and self-employed individuals, whether resident or not and whether Cypriot or not. However, non-resident employees of offshore entities are excluded. Self-employed persons are assessed on notional income levels depending on their occupation.

Contributions to the various funds are tax-deductible, and the employer's contribution is not taxable for the employee. Benefits include a normal range of income and lump-sum payments.

The maximum amount on which social insurance contributions are estimated is set annually by the government. For the year 2017 it is €54,396. Percentage contributions to social insurance are as follows.


Employer’s contributions

7.8% (plus 2% 'social cohesion fee')

Employee’s contributions

7.8%

Self-employed contributions

14.6% 

Employer's contribution to Redundancy Fund and Industrial Training Fund

1.2% and 0.5%

Employer's contribution to Holiday Fund

8%

NB: The Defence Levy as such was abolished under a new taxation package agreed by Parliament in July 2002; however, various types of unearned personal income are subject to a defence tax of between 3% and 20%.

 

 

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